There\u2019s a lot of confusion about taxes in this and every election cycle. Here\u2019s what you should keep in mind as you dissect the plans proposed by the two major presidential candidates.<\/p>\n
Before we start, taxes are essential to an economy. Even a limited constitutional government requires revenue to operate. A lower tax rate is almost always better than a higher one, but the details are important. Taxes should be spread among the beneficiaries of government services\u2014not just the rich\u2014and should be as low as possible to as to fund a constitutional government. Tax systems should be simple and transparent; our current code is neither.<\/p>\n
Clinton\u2019s proposal is simple\u2014tax the rich to pay for more government. Aside from the moral problem with such plunder, it doesn\u2019t work. The rich don\u2019t have enough to pay for our oversized government and soaking them hurts business investment. Clinton would counter this with more tax \u201cincentives\u201d to prod individuals and businesses into activity she thinks is best for them and the country. Add to this another \u201cstimulus plan\u201d to reward her supporters and you have a repeat of the last eight years. It\u2019s classic progressivism.<\/p>\n
Trump\u2019s proposal is equally simple\u2014cut taxes across the board and reduce regulation. The resulting growth would expand the tax base and increase tax revenues. Trump isn\u2019t looking to reduce spending, although he could (arguably) hold the line if he has majorities in the House and Senate. His approach is a blend of supply side economics and populism.<\/p>\n
If I were grading, Clinton\u2019s plan would easily get an F. Without some good luck in the coming years\u2014no wars, cheap energy, and the like\u2014the best it can produce is a repeat of the Obama stagnation. With a bad break or two, it could be worse. The irony is that the social engineering (loopholes) inherent in her plan creates the very cronies she claims to despise. Wealthy individuals and corporations can reduce their taxable income by taking advantage of the \u201ctax incentives\u201d progressives inflict on the economy. It also increases complexity and reduces transparency, with more tax brackets and complications.<\/p>\n
Trump\u2019s plan would get a C. It\u2019s decidedly better than Clinton\u2019s, but it could be better. Trump and the Republicans had a huge opportunity to simplify the tax code with a single, low flat rate, or even two rates to win over the moderates. He could have addressed entitlements, capping the growth on Social Security and allowing younger Americans to choose another option. He could have proposed a universal basic income (UBI) to completely replace ALL government transfers. Any of these would have been game-changers. His election would be a wrecking ball for Washington, but his economic policies wouldn\u2019t differ much from those of previous Republicans.<\/p>\n
Of course, we shouldn\u2019t assume that either candidate\u2019s proposals would be implemented as proposed. The Republicans aren\u2019t known for much opposition in the House, but if they maintain one or both majorities and a scandal-ridden Clinton is elected, major initiatives could be off the table. Likewise, Trump hasn\u2019t made too many friends in the halls of Congress, so he would likely face some opposition as well. The only scenario that would likely result in major economic change would be a Democrat sweep. It\u2019s not out of the realm of possibilities, but I\u2019m not betting on it.<\/p>\n
Overall, a C is not an A, but it\u2019s better than an F.<\/p>\n","protected":false},"excerpt":{"rendered":"
There\u2019s a lot of confusion about taxes in this and every election cycle. Here\u2019s what you should keep in mind as you dissect the plans proposed by the two major presidential candidates. Before we start, taxes are essential to an economy. Even a limited constitutional government requires revenue to operate. A lower tax rate is […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/battle4liberty.com\/index.php?rest_route=\/wp\/v2\/posts\/1050"}],"collection":[{"href":"https:\/\/battle4liberty.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/battle4liberty.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/battle4liberty.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/battle4liberty.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1050"}],"version-history":[{"count":0,"href":"https:\/\/battle4liberty.com\/index.php?rest_route=\/wp\/v2\/posts\/1050\/revisions"}],"wp:attachment":[{"href":"https:\/\/battle4liberty.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1050"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/battle4liberty.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1050"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/battle4liberty.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1050"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}